Bakery Insurance Hawaii Policy Information
Bakery Insurance Hawaii. Bakeries produce baked goods such as bagels, biscuits, breads, cakes, cookies, crackers, pastries, pies, and rolls. Some are commercial operations that mass-produce large quantities of baked goods. These tend to be highly automated, with the distribution of products primarily to grocery stores, restaurants, and supermarkets. They may have a retail store selling directly to the general public.
Other bakeries are smaller operations that use manual processes to customize and specialize in a particular product such as birthday or wedding cakes. Some retail bakeries have facilities for on-premises consumption, such as a donut shop or a full-service restaurant.
When it comes to buying fresh loaves of bread or rolls for dinner or Sunday morning croissants, Americans love their bakeries. Owning a bakery can be a lucrative endeavor, although it is certainly not without some risks. A comprehensive HI bakery insurance policy can help you protect your small business from potential loss and liability, so you can remain profitable, even when perils are afoot.
Whether you own a small bakery in your neighborhood or a big chain bakery line, protecting your finances and your business with the right level of bakery insurance Hawaii coverage is important.
Bakery insurance Hawaii protects your business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Protect Your Bakery Business from Loss and Liability
Even small bakeries needs bakery insurance Hawaii policies to guard against potential risks in the business from liability and property damage.
Some bakery insurance Hawaii policies to consider include all or some of the following:
- Worker's comp insurance. Work-related injuries such as burns, slip-and-falls, or other injuries are not at all rate in the bakery industry. Worker's comp insurance is mandated in Hawaii for all employees other than the business owners. This type of coverage provides employees with needed medical coverage to handle injuries and illnesses with work-related causes.
- Unemployment insurance. This type of coverage is provided with your HI state tax bill. After establishing your bakery and registering the business with the workforce agency in the state in which you do business, the state begins collecting tax and your business is covered with this type of insurance.
- Medical insurance. Under the Affordable Care Act, if your business employs more than 50 people, you must subsidize your employees' health insurance. Work with an agent to insure that you're in compliance with the law and your employees are covered.
- Commercial auto insurance. If you offer delivery services in your HI bakery or you do off-site catering, then chances are that you need commercial auto insurance. This type of policy covers company-owned vehicles and must be maintained at the state's minimum coverage levels or better.
- Bakery business insurance. This is a general policy that is designed to cover the unique risks of the bakery business. It provides coverage of basic business insurance for small business with a special focus on the risks that are known throughout the bakery industry.
Coverage Provided by Bakery Insurance Hawaii
Bakery insurance is a small business policy that limits your business' risks from liability, injury, and accident. Some different types of policies are often combined into a larger policy with the following coverages:
- Liability insurance. Liability insurance for HI bakeries usually has two main parts, with each part covering specific risks. This coverage also handles legal fees and court costs that result from liability suits and claims.
- General liability insurance. This coverage handles claims that result from individuals being injured while inside your HI business or on your business' premises. This type of coverage protects the business from third-party lawsuits.
- Product liability coverage. Should your baked goods become contaminated with something such as foodborne bacterium or broken glass, then product liability insurance is a must. This protects you from liability claims as a result.
- Property insurance. Property coverage for businesses usually comes in two parts. You usually need flood insurance separately than traditional insurance that takes care of your business' property.
- Building coverage. If you own the building in which you do business, then you need coverage on it. This protection provides compensation for the structure for damages caused by vandalism, weather, or fire, among other covered perils.
- Business contents insurance. For kitchen appliances, bakery equipment, and other contents of your HI business, a separate contents policy is often a smart investment. This covers the contents of the business if they are damaged or loss due to covered events.
- Equipment breakdown coverage. Protect your vital equipment with this type of insurance. Ideal for bakeries with commercial mixers, ovens, and other expensive equipment, this policy protects you from mechanical failures, power surges, and more, so you can continue operating.
- Food spoilage insurance. An extended outage of power can cause massive food spoilage, affecting your bottom line. Choose this type of coverage to protect your business from the cost of replacements.
- Income loss insurance. If something causes your business to be unable to continue to operate, this insurance provides an income stream to help you stay afloat during the work stoppage.
Hawaii Bakeries' Risks & Exposures
Premises liability exposure is light if visitor access is limited to repairmen and inspectors. If tours are given or retail operations are conducted on-premises, all life safety codes must be met to assure visitor safety. Good housekeeping and nonslip flooring finishes are critical to minimizing slips and falls. Spills of liquids should be promptly cleaned up and warning signs posted.
Exits should be clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed.
Products exposures are moderate due to the possibility of contamination, spoilage, and foreign objects in the baked goods. The workplace must meet all FDA specifications for sanitary working conditions and be arranged to prevent foreign substances from entering the processing area. Controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides. Stock dating and rotation are important factors. Recall procedures must be in place that can be activated quickly.
Environmental impairment exposure may be significant if underground tanks are used to store cooking oils or fuel for vehicles or equipment. Storage and waste disposal must comply with all federal and state requirements. All waste items must be removed regularly by a qualified outside contractor. Ovens used to bake yeast products may release ethanol into the atmosphere. An ethanol abatement system must be in place, preferably a catalytic oxidation system. If there are underground storage tanks, a UST policy will be required.
Workers compensation exposure can result from burns caused by the ovens, machinery, and equipment, cuts or accidental dismemberment from rotating blades or moving parts on machinery, foreign objects in the eye, hearing impairment from noise, back injuries or a hernia from lifting, and slips and falls from spills and inadequate housekeeping. Safety equipment should be provided, and all machinery should be properly guarded.
Prolonged exposure to flour dust can result in abrasion of tooth enamel, allergic reactions, asthma, and contact dermatitis. Ventilation systems should be in place in fermenting areas and on ovens to prevent the accumulation of noxious gases that can lead to lung injuries and asphyxiation. Forklifts should be equipped with backup alarms and be refueled in well-ventilated areas. Drivers are exposed to slips and falls and lifting injuries at customers' locations, hold-ups if they carry money on routes, and injuries from vehicle accidents.
Property exposures are significant. Ignition sources include the automated conveyance and processing equipment, baking/cooking ovens, electrical wiring, heating, and air conditioning systems, and refrigeration/cooling equipment. Combustibles include the fuel sources for the baking/cooking equipment, grease, and oil from any deep-fat frying operations, dust from the baking ingredients, and packaging materials. All machinery and equipment, including the ovens, must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity.
All machinery should be grounded to prevent static buildup and discharge. There should be adequate ventilation systems in place to prevent dust from flour and other dry ingredients from building up and spontaneously combusting. All frying operations must have automatic fuel shut-offs and be done under a fire suppression system. A sprinkler system is preferred. There should be annually tagged fire extinguishers throughout the facility. With any food product, even a small fire loss can be significant as state, local or federal regulations may require the disposal of major portions of stock and raw materials that have been exposed to fire, smoke, water or heat.
Spoilage losses can be severe if the refrigeration and cooling equipment malfunctions or loses power. Controls, such as alarms, must be in place to warn if power is out or if the temperature rises in coolers and freezers. Backup systems, such as emergency generators, should provide power if an outage or shutdown occurs. The business income exposure can be very high as some production equipment may be difficult to repair or replace quickly.
Equipment breakdown exposure is high due to the automated machinery and equipment used in the mixing and baking processes. All machinery and equipment must be regularly inspected and maintained. If there are boilers, operational safety valves must be in place.
Crime exposure is from employee dishonesty of both inventory and money. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. Regular audits by an outside firm should be conducted. Theft of money and securities may be a concern if drivers collect monies or if there are retail operations. Receipts should be issued for any cash payments received.
Inland marine exposure is from accounts receivable if the bakery bills customers, computers (which may include computer-run processing systems), contractors' equipment for forklifts, goods in transit, and valuable papers and records, including inventory records, customer files, quality control information, contracts with suppliers and distributors, and proprietary recipes. Most bakers transport their own goods on their own trucks. Most operate on a tight time schedule with early morning deliveries. Collision and overturn are the major causes of loss.
Business auto exposures can be significant. As early morning delivery is important to maintain product freshness, drivers may be required to deliver goods in darkness or during periods of inclement weather. They should be assigned to routes to increase their familiarity with traffic patterns. Drivers should have a commercial license and acceptable MVRs. Vehicles must be regularly maintained with records kept in a central location.
Buying Bakery Insurance
Find the best Bakery Insurance Hawaii policy for your bakery's unique needs by working with a seasoned agent. Consult with an agent to determine which coverage types you need and any riders or policy addendums that you must purchase to fully protect your business' financial future.
Hawaii Economic Data, Regulations And Limits On Commercial Insurance
Location is one of the most vital factors that prospective business owners need to take into consideration when they are thinking about establishing an operation. You can have the best possible products and offer the most exceptional services, but if the location doesn't offer a market that can benefit from those goods and services, your business will have difficulty thriving.
As such, if you are an entrepreneur who has set your sights on Hawaii for the headquarters of your business or a new division of an already existing corporation, it's a good idea to familiarize yourself with the state's economic data. It's also important to understand what type of commercial insurance you will need to invest in to protect yourself, your employees, your vendors, and the clients you serve.
Below, we provide a brief overview of important economic data and the commercial insurance requirements for business owners in the Aloha State.
Economic Trends For Business Owners In Hawaii
A state's unemployment rate is a good indicator of the overall economy of the region. It indicates that there are enough jobs available to support the economy, which is a direct reflection of the success of businesses in the state. As of 2019, the Bureau of Labor Statistics indicated that the unemployment rate in Hawaii was 2.6%, 0.8% lower than the national average of 3.4% from the same timeframe. This rate has also decreased throughout 2019, as it was 2.8% in July of 2019.
As with most states, the best locations to start a business in the state of Hawaii include urban areas and the suburban regions that surround them. The top cities for business owners in HI include:
- Pearl City
While several industries do well in Hawaii, certain sectors thrive. Tourism has long been the leading industry in the state, as people from around the globe flock to Hawaii each year.
Agriculture is also a booming industry here; the state is the second largest producer of sugar can in the U.S. Defense is also a key sector here, as all branches off the armed forces have bases located in the state. Another industry that also thrives here is manufacturing; specifically the manufacturing of cotton-based goods, such as clothing.
Commercial Insurance Requirements In Hawaii
The Hawaii Department of Commerce and Consumer Affairs regulates insurance in HI. Hawaii mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Hawaii requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Hawaii also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Food Service Insurance
Learn about restaurants, bars, liquor stores commercial insurance coverages. See how small business food service insurance help protect against accidents, oversights and lawsuits resulting from business operations.
- Bagel Shop
- Beer Distributor
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
Bars, taverns, restaurants, cafeterias, and other eating and drinking places have significant insurance needs in three separate areas.
The first is property protection for physical damage to equipment, furnishings, building and supplies due to fire and other perils.
The second is premises liability coverage to protect customers due to slips, trips and falls on the premises, as well as for consumption of food products.
The final need is protection for employees due to frequent cuts, burns and other common employee injuries. Establishments that sell or serve liquor or other alcoholic beverages also need liquor liability coverage.
Slips and falls, along with customer illness due to being served tainted food or drink, are the primary liability exposures. The commercial general liability (CGL) is used to provide coverage for these exposures.
It is important to note that liquor liability coverage is excluded under the CGL form if a risk is in the business of serving alcoholic beverages. Many establishments in this category should therefore consider purchasing a separate liquor liability coverage form.
Restaurant kitchen equipment, inventory and dining room fixtures are common exposures for most eating and drinking places. Many of these establishments do not own the buildings they occupy but have long-term leases and have invested money in various improvements and betterments, including cooking equipment, dining room decorations and permanent fixtures.
There are major differences in the food service business and the very different exposures they present. There are many specific types of restaurants to cater to individual needs and tastes. There a several main commercial insurance classifications for food service.
Concessionaires: The most basic "eat on the run" type of restaurant is not classified as a restaurant at all but is referred to as a concessionaire. Class Code 11168: Concessionaires applies and the accompanying note states that all food and beverages must be sold through hawking or peddling. There can be no location to which customers walk up and purchase the food. This classification includes food sold at sporting events, exhibitions, and parks.
Caterers: Are very similar to restaurants with significant differences. The caterer prepares the meals at its own kitchen or commissary and then transports it to the locations where it will be served. Some final preparation may take place at the final location but the majority generally takes place at the caterer's location. The caterer's employees serve the meals and beverages and oversee the consumption of the food.
Restaurants: The way restaurants are categorized and classified uses the percentage of alcoholic beverage sales as the first criteria, followed by other features or operations.
Common to all of these categories is that entertainment-oriented venues such as nightclubs, cabarets, dance halls, discotheques, and comedy clubs must be separately classified and rated. This means that the sales that those entertainment activities generate must be broken out and rated separately from the sale or food and drink.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Spoilage, Equipment Breakdown, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Nonowned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivables, Bailees Customers, Fine Arts, Cyber Liability, Employment-related Practices, Environmental Impairment, Liquor Liability, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.
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